The main legal point established in the judgment is that courts cannot fix wage structures/salaries, and the economic viability and financial capacity of the employer are important factors in determining wage structures.

Valmiki J. Mehta, J.

1. No one appears for the petitioners. No one even appeared for the petitioners on 10.5.2013, 30.7.2013, 30.9.2013 and 1.10.2013. It may be noted that this writ petition was dismissed in default on 10.7.2007. Application for restoration was filed and which was also dismissed on 23.7.2007, however, subsequently the matter was restored in terms of the order dated 27.7.2007.

2. By the writ petition petitioners are seeking implementation of the office memorandum dated 25.6.1999 issued by the Government of India, Ministry of Industry, Department of Public Enterprises for revision of pay-scales under IDA Pattern w.e.f 1.1.1997.

3. I may note that there is a typing mistake either in the writ petition or in the memorandum because the memorandum annexed as Annexure F which is stated to be dated 25.6.1999 actually is dated 29.6.1999.

4. Irrespective of the issue of date of the memorandum, the subject office memorandum which is relied upon for grant of increase of pay-scales contains the following important paragraphs 6 and 7 which read as under:-

“6. In respect of sick enterprises referred to the BIFR, revision of pay scales would be strictly in accordance with rehabilitation packages approved or to be approved by the BIFR and after providing for the additional expenditure on account of pay revision in these packages.

7. Presidential directives would be issued by all the administrative Ministries/Departments. Indicating these scales as a ceiling, as the actual payments would depend on the capacity to pay of the enterprises. The resources for meeting the increased obligation for salaries and wages must be internally generated and must come improved performance in terms of productivity and profitability and not from Government subvention. The Presidential directives would also cover guidelines relating to dearness allowance and ceilings on perquisites. A format of the Presidential directive is suggested in Annexure-IV.”

5. A reading of the aforesaid paras 6 and 7 clearly shows that there is no automatic entitlement of employees of companies to automatically get higher pay-scales, much less of those companies which are sick companies such as the respondent no.2. These issues have accordingly been held by the Supreme Court not to be justiciable before courts because it is the employer which best decides what are the pay-scales of employees. The two judgments in this regard are Indian Drugs & Pharmaceuticals Ltd. Vs. Workmen, Indian Drugs & Pharmaceuticals Ltd. (2007) 1 SCC 408 and A.K. Bindal & Anr. Vs. Union of India & Ors. (2003) 5 SCC 163.

6. The relevant paras in the case of I.D.P.L (supra) reads as under:- “16. We are afraid that the Labour Court and the High Court have passed their orders on the basis of emotions and sympathies, but cases in court have to be decided on legal principles and not on the basis of emotions and sympathies.

18. In State of M.P. v. Yogesh Chandra Dubey this Court held that a post must be created and/or sanctioned before filling it up. If an employee is not appointed against a sanctioned post he is not entitled to any scale of pay. In our opinion, the ratio of the aforesaid decision squarely applies to the facts of the present case also.

37. Creation and abolition of posts and regularisation are purely executive functions vide P.U. Joshi v. Accountant General. Hence, the court cannot create a post where none exists. Also, we cannot issue any direction to absorb the respondents or continue them in service, or pay them salaries of regular employees, as these are purely executive functions. This Court cannot arrogate to itself the powers of the executive or legislature. There is broad separation of powers under the Constitution, and the judiciary, to, must know its limits.

40. The Courts must, therefore, exercise judicial restraint, and not encroach into the executive or legislative domain. Orders for creation of posts, appointment or these posts, regularisation, fixing pay scales, continuatio